MIDLAND — The Mackinac Center for Public Policy’s annual school privatization survey found that 40.2 percent of conventional public school districts in Michigan contract for one of the three major noninstructional support services. That is up from 37.8 in 2006. The largest increase in privatization came from custodial services — 16 districts signed contracts to provide these services.

Mid-sized districts were the most likely to privatize. More than half of the
districts that educate between 2,000 and 4,000 pupils contract for food,
custodial or transportation services.

Overall, 89.2 percent of districts that contract report being pleased with their experience. Just under 10 percent were unsure and less than 1 percent said they were not pleased.

Privatization of support services also offers savings to districts, with 79.2 percent reporting that contracting has saved the district money.

LANSING — The Department of Human Services appropriation bill includes an expansion of privately provided foster care. The bill was passed in the Senate and sent to the House appropriations committee.

Currently, when a child is placed in foster care, a Human Services field office determines whether to use a privately organized foster care service, like Lutheran Child and Family Services of Michigan, or one of the state’s registered foster families. Foster families face the same oversight requirements and regulation, regardless of whether they are affiliated with public or private agencies.

There are currently almost 19,000 children in foster care, of which only 36
percent go to licensed foster care establishments. Of those, almost 60 percent
are supervised by private agencies, according to the Michigan Department of
Human Services.

If adopted, the move is anticipated to save the state $19 million annually.

Ottawa County extends contract for plowing

OTTAWA COUNTY — Road commissioners for Ottawa County, which contains the cities of Grand Haven and Holland, voted to expand a contract to provide snow plowing services, The Grand Rapids Press reported.

The county spent more than $95,000 in private plowing services last year, which was only slightly less than the county’s in-house costs to provide the services. However, the county will not have to hire temporary workers in the winter who would be laid off in the summer, according to The Press.

The road commission had hired Countryside Snowplowing to plow 82 miles of county roads. The new contract extends the area covered to 192.5 miles, according to The Press.

WILLIAMSTON — In order to take advantage of professional services, a small town outside of Lansing decided to contract for its community development and
planning directors, according to the Williamston Enterprise. The city has agreed to hire McKenna Associates Inc. to provide the services.

Officials expect that the move will save money. Filling the positions directly would cost approximately $140,000. The contract calls for a base payment of $116,880 per year, the Enterprise reported.

“For us, it works out better because we could never afford an on-staff planner. They have so many resources they can tap into at their office for design and any type of ordinance from landscaping to cemeteries to ballparks and everything. It’s like having twenty people working for you, but you only pay for the one that’s here for the day,” township Supervisor Mickey Martin told the Enterprise.

If the city is dissatisfied with the contract, it can immediately terminate it, the Enterprise reported.

CLAYTON TOWNSHIP — Officials for the Village of Lennon, which is located
partially in both Shiawassee and Genesee counties, are contemplating a bid by a
neighboring township to provide police services to the village, according to the Swartz Creek News. Currently, the village has its own police force of four — one full-time officer and three part-time officers.

Clayton Township offered to provide the services for $67,000, but may add $4,000 to $5,000 in startup costs, according to the News. The contract will be for one-year as a trial period.

Currently, the village and townships will provide backup coverage of the other’s area and will patrol them, the News reported.

MIDLAND — The Mackinac Center for Public Policy released “A School Privatization Primer for Michigan School Officials, Media, and Residents,” the third book in the Center’s Michigan School Management series.

The primer discusses the scope of privatization across the country, reviews the academic literature on school districts that contract and discusses the “request for proposals” process districts can use to solicit bids for food, custodial and transportation services.

YPSILANTI — Lincoln Consolidated Schools was exploring contracting with a
private vendor for custodial and maintenance services, and passed a budget that
required $1.2 million in savings those areas.

However, due to a combination of lower than expected costs in operating the
district’s buildings and grounds and late-hour union concessions, the district
chose to keep the work in-house. The district signed a one-year collective
bargaining agreement with its custodial union.

The district may look to contract for the 2009 fiscal year, depending on state school aid spending.

Reference:
The Ann Arbor News, “Lincoln school district delays decision on privatization,”
June 16, 2007

Fraser contracts substitute teachers

FRASER — As part of a plan to cut $718,000 from its budget, the school board at Fraser Public Schools is looking at contracting for substitute teacher services and other support faculty. The move is estimated to save the district $87,000, according to The Macomb Daily.

State law allows school districts to use the services of a private company to dispatch substitutes. This saves districts 17.74 percent of payroll by not
having to provide for pension fund contributions for the substitutes. Since
substitutes typically do not work full-time, it takes an extended period to
become fully-vested in the school pension fund.

Most private companies offer 401(k) retirement accounts instead of the
defined-benefit plan in school districts.

In addition to contracting for substitutes, Fraser may eliminate some teaching positions and reduce its support staff.

HOWELL — Howell Public Schools is facing a $2.1 million deficit for its next
fiscal year, according to The Livingston Press. As part of its plan to eliminate this deficit, the district contracted for its custodial services.

The move is expected to save the district $400,000 in the first year alone. The district’s custodial union offered concessions that would have saved $242,000, but the district went with the private vendor, according to The Detroit News.

PETOSKEY — Expecting to lose $52,000 in its food service program for the
upcoming fiscal year, the Public Schools of Petoskey board voted to expand its
food service contract to include labor, according to the Petoskey News-Review.
Its provider had previously been providing for only the management of the
district’s food services.

“They fully anticipate to hire 100 percent of their workers in the
Emmet-Charlevoix area,” school business manager Kent Cartwright told the
News-Review.

Under the new arrangement, revenues are expected to exceed costs by $150,000, according to school board member Jack Waldvogel.

HARRISON — The Michigan Education Association school employee union requested an injunction to stop the Harrison Community Schools from contracting its teachers aides, according to the Mt. Pleasant Morning Sun.

Currently, contracting for noninstructional services is a prohibited subject of bargaining for districts. The court ruling in this case may decide whether
teachers aides are considered noninstructional employees.

HANOVER — The Hanover-Horton Schools is looking to save money by contracting its custodial services, according to The Jackson Citizen Patriot.

Without contracting, the district is expecting to pay $464,438 to clean and
maintain its buildings. The lowest private bid came in at $295,525, which is 36
percent less than it would cost for school employees to provide the service,
according to The Patriot.

EAST LANSING — The East Lansing school district switched its food service
provider from Aramark to Chartwells, according to the Lansing State Journal.

Contracting for food service is a regulated business, with a number of
recommended nonprice factors included in the state’s prototype Request for
Proposals. While Aramark provided the lowest bid for the service, other factors
secured the recommendation to contract with Chartwells.

MARSHALL — The Marshall Public Schools board of education recently voted to
contract its custodial services to Grand Rapids Building Services. The move is
expected to save the district up to $1.1 million over the next three years,
according to The Battle Creek Enquirer.

For $10 a week, an employee may buy an individual insurance plan through the
company. Also, hourly rates from GRBS will only be a dollar less than what the
district currently pays.

“It’s been tested in dozens of schools in dozens of states. It’s growing each year because it works,” board Treasurer Dan Stulberg told the Battle Creek
Enquirer.

GRAND RAPIDS — Organizers turned in three signatures — all of which were
declared invalid — in an attempt to recall a Grand Rapids Public Schools board
member after he voted to privatize its transportation and substitute teacher
services, according to The Grand Rapids Press.

The effort needed 15,960 signatures in order to force a recall vote of David
Allen.

Michigan Privatization Digest is a service of the
Michigan Privatization Report, a twice-yearly publication of the Mackinac Center for Public Policy with a circulation of more than 22,000. The Mackinac Center for Public Policy is an independent, non-profit research institute located in Midland, Michigan.